What Does Taxi Insurance Cover?
Taxi insurance covers the use of a vehicle to carry passengers in return for payment. You may see it referred to online as private hire insurance or hire & reward, and all 3 can cover you for taxi driving. It’s important to be diligent, though, as some forms of hire and reward aren’t designed for carrying passengers (but instead food delivery, furniture removal, etc.) and thus won’t cover you sufficiently to take paying customers to their destination. This article should answer any initial questions you have, but you can find out more about taxi insurance at NimbleFins to compare quotes, see average costs and more.
What exactly you’re covered for will depend on the level of coverage you opt for. Just like social, domestic & pleasure (SD&P) vehicle insurance, taxi coverage comes in three levels: third party only (TPO), third party, fire and theft (TPFT), and comprehensive.
TPO cover will only cover you for damages to other parties. This means that if you’re involved in an accident, and your vehicle sustains damage or is stolen/damaged in a fire, you’ll be required to cover the cost of repair/replacement yourself. And while it would be logical to assume TPO is the cheapest coverage level, it often isn’t the case. Insurers may be more willing to offer coverage to risk-averse comprehensive customers at better rates.
TPFT cover includes everything mentioned above but will also protect your vehicle if it’s stolen or damaged in a fire. Not every insurer will offer TPFT coverage to taxi drivers, couriers, and the like, as drivers might be required to regularly step out of the vehicle while leaving the engine running and, in the case of taxi drivers, regularly allow strangers into their vehicle – so it isn’t necessarily surprising to see some insurers shying away from covering theft without full comprehensive cover.
Comprehensive is the highest level of cover, including everything from a TPFT policy but with additional protection for damages to your vehicle. Comprehensive is the only coverage level that will cover the cost of repairing your taxi in the event of an accident you’re at fault for. Given the number of hours you’ll be spending on the road and the importance of your taxi to your income, it’s well worth the investment – and, as mentioned above, you may even find it cheaper than lower levels.
What should taxi insurance cover?
Taxi insurance should cover you to drive paying customers from A to B using your vehicle. It’s more expensive than traditional social, domestic & pleasure (SD&P) car or van insurance, as driving professionally exposes you to risks you wouldn’t see as regularly while driving for personal reasons. For example, you’ll spend more hours behind the wheel than the average driver, racking up long miles and often driving in locations you’re not 100% familiar with.
It’s illegal in the UK to drive a taxi without valid insurance, and the penalties can be severe – up to £5,000 in fines and 6-8 penalty points for each offence, so don’t risk being caught on the road without it.
What exactly your insurance covers you for will, naturally, depend on the coverage level you opt for. At an absolute minimum, your taxi insurance will cover you for any damages to third parties you cause while behind the wheel. Higher coverage levels can include any damages you incur through an accident, fire, or in the event of theft – a good investment, especially if you rely on your taxi for a decent portion of your income.
Do taxi drivers need public liability insurance?
While not a legal necessity, taxi drivers should hold a form of public liability insurance. It isn’t usually included within your taxi insurance (although some specialist insurers/brokers may include or recommend it), so you may need to sort out a policy yourself. Thankfully this isn’t too complicated and can usually be sorted in a matter of minutes.
Public liability will protect you while you’re dealing with customers and members of the public. It’ll protect against claims made by third parties that your work caused them injury or property losses/damages. When combined with your taxi insurance, you’ll be able to go about your work knowing you’re covered for many of the most common issues taxi drivers can face regarding their customers.
Example: You’re helping a customer load their bags into your taxi outside a busy airport when a passerby trips over them. They hurt themselves quite badly and have to take 4 weeks off work. They sue you to recover their lost wages.
Does taxi insurance cover food delivery?
Whether or not your taxi insurance covers you for food delivery depends entirely on your policy and provider. Unfortunately, there isn’t a short answer to the question as some will allow it and some won’t.
During Covid-19 restrictions, the Association of British Insurers confirmed that taxi/private hire insure would be sufficient to deliver parcels, takeaways or grocery deliveries and that drivers could operate without having to inform their insurer – but this commitment will end as Covid-19 regulations ease up, so doesn’t offer a permanent solution.
It is worth noting that most insurers do require you to inform them if you’re changing occupations or using the vehicle for purposes you didn’t mention when signing the original agreement, so we’d recommend playing it safe and checking ahead of time, especially in the post-Covid UK.
Does taxi insurance cover personal use?
Taxi insurance should cover you to drive your vehicle for personal use. The only time it wouldn’t is if you’re using a part-time/top-up insurance solution, like the one offered by Zego. These forms of insurance (often referred to online as pay-as-you-go or top-up hire and reward) sit ‘on-top’ of your existing personal use (SD&P) insurance, thus requiring you to hold an existing SD&P policy before signing up. Check your certificate of motor insurance to confirm.